US crypto lawsuits reach all-time high with 42% increase in 2022; SEC cases dominate legal battle
According to research published by HedgeWithCrypto.com, cryptocurrency-related lawsuits fluctuate every year, similar to the price cycles experienced by cryptocurrencies. The study sees a 40 percent increase in crypto lawsuits between 2018 and 2022, but the high growth also sees some downside. Across all years, 2022 saw a total of 41 lawsuits in the United States. 2019 saw a 30% drop as the number of lawsuits dropped from 30 to 21, the researchers explain. It then saw a dramatic increase of 62 per cent in 2020 and recorded 34 cases in 2020,” before a further decline to 28 in 2021. Finally, there was another increase (times over 46%) in 2022, with 13 more cases than in 2021.
About 19 crypto lawsuits for 2022 originated from the Securities and Exchange Commission as the country’s top securities regulator cracks down on unregistered services and securities. Through the years, cryptocurrency use has been most common in lawsuits related to unregistered services and securities, with a total of 53 lawsuits since 2018. Initial coin offering (ICO) fraud accounted for 12 prosecutions while theft and fraud accounted for 10 prosecutions since 2018. Non-disclosure matters or illegal promotion of cryptocurrencies have been attributed to 8 lawsuits, while false and misleading statements about a crypto product represent a total of 5 over the past 5 years. The research noted that “misrepresentation of payments for the promotion of crypto products is one of the most notorious cryptocurrency-related lawsuits, often involving celebrities.”
For example, the Emax Promotions case involving Kim Kardashian and the Securities and Exchange Commission generated more than 50,000 articles about topics recorded on Google’s search engine, the lowest number of lawsuits in the last 5 years that affected the company’s revenue. Ferry and pyramid scheme were related to the fraud. Researchers at Hedgewithcrypto.com obtained that and compiled data from Securities and Exchange Commission lawsuits filed by Stanford Law.